Australia shares flat, strong defensives offset by ex-dividend trade
(Adds analysis, quotes, stocks on the move)
SYDNEY Aug 19 (Reuters) - Australian shares traded flat on Monday after Wall Street fell and some blue chip stocks slipped as they entered ex-dividend trade, but a strong defensives sector helped offset losses.
Telstra Corporation Ltd, Australia's top telecommunications provider, fell 3.2 percent while top lender Commonwealth Bank of Australia lost 2.9 percent as both stocks traded ex-dividend.
The local index has bounced back from a year-to-date low of 4,632.3 points hit on June 25, but speculation about the timing of an end to the Fed's bond buying stimulus and a mixed bag of earnings results have seen shares drifting away from the 5,200 levels tested early last week.
"While conditions are right for further upside in Australian shares, the overhang of Federal Reserve stimulus concerns is capping returns," said Tim Radford, global analyst at Rivkin Securities in a note.
The S&P/ASX 200 index was flat at 5,114.7 by 0155 GMT. The benchmark fell 0.8 percent on Friday but rose 1.1 percent for the week.
However, defensives helped buoy the market with consumer staples retailers Woolworths Ltd and Wesfarmers Ltd posting gains of 1.4 percent and 2.1 percent respectively, as their relatively high yields of between 3 percent and 4 percent appealed to investors.
"Markets are being cautious at the moment," said Biyi Cheng, head of dealing at City Index, noting that investors are waiting for minutes to be released from the Reserve Bank of Australia and the U.S. Federal Reserve.
"These sectors (defensives) are being pushed up for protection, that's why high-risk sectors are pulling back."
Among risk-prone stocks, miners were trading modestly lower after spot iron ore came off five-month highs. Blue chip miners BHP Billiton Ltd and Rio Tinto Ltd were both trading flat. Fortescue Metals Group Ltd fell 0.4 percent.
Silver miner Alcyone Resources Ltd slumped 20 percent to almost zero after saying it was looking for a new counter party to pre-buy its silver at fixed prices.
Among companies reporting, Bluescope Steel Ltd, Australia's largest steelmaker, dived 15.7 percent to A$4.61 after the company said uncertainty over domestic demand meant its first-half result for 2014 would not better its 2013 second-half result.
Australian packaging group Amcor Ltd dropped 1.2 percent despite reporting a 8.6 percent rise in full-year net profit before one-off items on Monday, and said its business would deliver increased earnings in 2014. The stock hit an all-time high of A$11.17 on August 1.
Investor sentiment was also dampened after U.S. stocks fell slightly on Friday and the Dow industrials posted the biggest weekly loss this year as rising bond yields hurt high-dividend shares and earnings from retailers disappointed investors.
New Zealand's benchmark NZX 50 index slipped 0.1 percent or 3.8 points to 4,510.1.
(Reporting by Thuy Ong; Editing by Eric Meijer)
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